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  • Posted by $ Thoritsu 4 months, 1 week ago
    Inflation will be the one this administration can not avoid in the next election. It is going to take an even more massive media cover up to blame that on Trump. China and unrest in the Middle East is another. Trump was well on his way to getting that in line.
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    • Posted by TheRealBill 4 months, 1 week ago
      IMO almost everyone is underestimating the inflation issue. But for different reasons.

      Back when we started tracking "inflation" it was a measure of how much it took to maintain a standard of living. But in the 1980s and 1990s the government changed the formula in specific and obviously faulty ways.

      1. They removed the "maintaining a standard" aspect. In this change they decided to allow themselves to substitute cheaper and inferior or lower quality goods if the regular goods increased. The example I like here is steak. If you eat steak, say 3-4 times a week, and steak prices go up, then your cost of living - your cost to maintain your standard of living - has increased, ceteris paribus.

      Prior to the change, that would register as inflation. After, they would look ad say "well, ground beef is still beef and is cheaper, so we will swap those" and the inflation is hidden.

      The next major change is more egregious. You could make an argument for a second metric to cover the decline in standard of living at a fixed price level, and it may be useful. But this one, this one is absurd.

      For their next trick they removed "out of pocket" expenses. The primary example here is the federal regulations that changed the formulation of gasoline that caused a 10 cents per gallon in crease in the price of gasoline. Under the old formula, that rise would have been reflected in the inflation figures.

      But under the new method they specifically excluded government mandated increases. Even though we paid more, because the government mandated it, it isn't counted as inflation. There is no logical and non-nefarious reason I have found to justify that move.

      But there is a reason underlying all of it. Some here will remember the inflation of the 70s and early 80s. For those who don't, know that it is the low benchmark everyone uses for bad inflation. Well, when we aren't using one of the many countries that run socialist and hyper inflate from just raw printing of currency.

      So it was top of mind for people in the 1980s and 1990s. However, there is a deeper issue. Much of federal government spending is tied to that "inflation" figure. Because back then it made sense - it was a reflection of the change in maintaining a standard of living. Thus if, for example, you wanted to retire and not do so with a decrease in your standard of living, you wanted your retirement income/fund to "keep up" with it.

      However, combine federal mandates to tie spending unavoidably to that metric with high increases in that metric and anyone with even a basic understanding of economics can predict what happened next. This creates a strong incentive for that number to not rise, and ideally to shrink.

      So they shrunk it.

      How much, though? Well, if you use the original basket and formula from pre-1980s ... its bad. Around/In 1980 under the old formula we peaked at nearly 15%. Using that same formula/basket we are currently around 13%.

      Yes, we are in the same realm of inflation right now as we were in the late 1970s. And everyone is worried it is getting worse, and think we are tickling 5%.

      To point out that the incentive I mentioned above isn't merely theoretically, consider this quote from 2011:

      “The need to break the back of that (budgetary debt) spiral is as dire now as was the need for Paul Volcker to break the back of inflation in the 1980s” - Dallas Federal Reserve President Richard Fisher, April 2011

      They knew of the problem, and they knew they changed the methods and formula to change the outcome to "handle" for the budget problem.

      If you've ever wondered why the reported inflation doesn't seem to match what your wallet sees, now you have an idea why. Because the official inflation figure is not meant to.

      But wait, there is more!

      What happened? The wealthy went for the a form of wealth they knew would stand up after the inflation problem subsided. They bough real estate. A lot of it, and at the higher prices only they could afford. Does that sound familiar?

      At the time those who had staunchly advocated the "loose/easy money" policies and the "we must make money cheap to fight unemployment" stand of Nixon (side note: one of his advisers described Nixon's exotics as "conservative men with liberal ideas", Keynes, and government spending/control types all blamed OPEC and oil prices. But really, it was our own government that did it to us with cheap money and profligate government spending to "save" us from inflation.

      It started under Nixon but was made worse by the doubling down of Carter. It took several years from the onset of it, then overall a bit over a decade to peak and reverse. The reverse was mainly due to the massive reversal of said policies by the Reagan administration.

      Of note here, we see the same effect with the Trump policies. It bought us time, but the loss of those has allowed it to resume heading in the wrong direction.

      And what do we see now? We see the same levels of inflation (both in terms of our wallets and the official numbers) the 1970s, brought about by quantitatively eased money and absurdly low interest rates; we see a scapegoat commodity being set up to be the problem; we see the wealthy flocking to real estate as a hedge; and we see the lefties laying the groundwork to shift the blame to those wealthy for buying those properties.

      We see stagnated employment numbers; we see prices rising; and we see the lefties calling for preventing the market from recovering.

      It won't just be this administration that has to deal with it. IMO this one is trying desperately to shed blame and kick the can down the road. Meanwhile their attempts to "help" will only make it worse - just as was done in the 2008-2012 years and in the 1970s.

      Sadly, I suspect we may not be a slick as we wee in the 1980s. Back then the unreason movement hadn't built up and reason was still accepted and used. Today, on that front, we are more like the Weimar Republic - our "art" is anti-art, there has been a sustained assault on reason, and all the things that make a good economy are being demonized as racist. That is what was happening in the late 1880s/1890s that played a massive role in the rampant inflation they went through leasing to the economic collapse that laid the groundwork for the National Socialists to come in and "solve" the problems created by earlier socialists.

      As far as the tipping point; in the early 1970/1971 we had Nixon dropping the gold standard (which cratered the value of the dollar). In 2020 we had Democrats forcing the economy into the shitter with lockdowns and millions of household "camps" where you had to be locked away for "public safety". While I would caution against reading too much into it, what became the National Socialist concentration camps started the same way.

      As the "Trump economic" showed, the American economy can still be a powerhouse when government gets the hell out of the way. This is what we need. As history shows, when government gets off the back of the capitalism and its economy, it can turn around over the span of but a few years. But also as history shows, we do seem to need a strong leader committed to making that happen to galvanize the people into ensuring it.

      And, frankly, I don't see any on the horizon in any party.
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      • Posted by $ 4 months, 1 week ago
        You kind of touched on it but it is important to know that the Central Banks and all of their ilk, are trying to crash it all so they can have their reset and all the wicked bad things that comes with it...the big one's being, no freedom, no cash and no property.
        I believe I touched on this in one of the: Tales about the dark side editions.
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        • Posted by TheRealBill 4 months, 1 week ago
          I don't believe that theory - it doesn't really fit. The central banks are run by people; people who at least as self-centered as the rest of us. To do what you describe would be to eliminate their position in society and the power they have at their disposal. I have serious reservations they would be trying to do it.

          As I've learned over the decades, and said often on here, looking at history can be quite informative. So what does history tell us about the proposition you make?

          The closest thing we have is Nero and Rome. Most of us are aware of the phrase "Nero fiddled, while Rome burned" or various wordings of it. And most of us are told it is demonstrating that Nero was busy not giving a shit about Rome while it was literally burning. But this is not true.

          Nero wanted Rome to burn down. He wanted it to burn down so he could rebuild it in the way he wanted it to look. I discount the suggestions and claims he started it - either personally or by directing it - because there just isn't evidence for that. I also discount the claims he did it to get the property - because as emperor he had the authority to just claim the property.

          What Nero was facing, however, was a public that did not want their buildings to look like ancient Greece built them. The fire gave him the opportunity to rebuild and well, at that point the old stuff was destroyed already so that was one hurdle down.

          Is suspect he did try to push the blame, somewhat successfully, on to the Christians (blaming another group for tragedies is far from new) to his political advantage. But where this stops short as a comparison to today is that Nero didn't want to destroy Rome, just to remake it visually. In your scenario the central bankers are Nero.

          The central bankers are not unintelligent, and we should never assume they are. They doubtlessly know that to eliminate private property is to eliminate their reason to be. They also know something else important: they know they are wholly dependent on the middle class.

          The money in banking, especially a central bank, comes from and is a product of the middle class - not the rich and not the poor. The rich mostly don't use traditional banking and the central banks don't really "care" about the rich because the rich have the means to sidestep the central banks.

          What you're describing is not the central bankers trying to destroy their system, but them fighting a war against the rich. I know, that sounds crazy, but hold on. To understand that, we can look to Eric Hoffler.

          One of the core contributions of his that goes widely unnoticed is his observation about the relationships between the three primary economic classes of society - the rich, middle, and poor classes. As he frames it, the rich "need to feel rich." Psychology has somewhat validated this.

          At some point you have "enough" money and psychologically you're fine. Making more than that is not driven by a mental desire to be happy, but something more. For most of the rich, this driver is the state of "being rich" - the lifestyle. To best explain this I need to sidestep into a personal theory/framework I've been working on: the "functional gap" among the classes.

          Think about the rich in 1920. What did they have, or could do, that the poor could not? They could call other people, they had central heating and some cooling. They had personal automobiles, and specifically the ability to get personal transportation with but a phone call. They had access to doctors, often with personal ones. They could go to shows, get their groceries or food delivered to their home.

          The middle class could not do these things (and more), and neither could the poor. The rich had refrigerators, the poor often didn't even have an icebox.

          The rich had functional things they could do or have the the lower classes did not. Most of these things were basically necessities.

          Now look at the "functional gap" in 2020. Ignoring the price or quality of a thing, what is that gap now? The poor have access to a global network just as the rich do, and can use the same devices. Whether you use a cheap Chromebook or a top of the line Apple computer, they fulfill the same functions. Whether you drive a base model Toyota or a high end Tesla, you still drive from point A to B. Whether you call a "rideshare"service or a limo service, you're still driven from A to B.

          So now, with that in mind, how can the rich "feel rich" when not only the middle class can do those same things the "poor" can? It gets pretty hard to, apparently. So as Hoffer put it, the rich need the poor so they can feel rich. He also predicted that the rich would whip up the poor to go after the middle class - who then are fighting a war on both fronts. After all, a less wealthy middle class means the poor are even less wealthy and the rich can feel rich.

          But one thing the bankers, even central ones, know is that they need the middle class to have the wealth needed to feel rich. Thus, even if they don't like us, they aren't seeking to destroy the middle class. Without us they don't exist and they are smart enough to know it.

          Instead, IMO, what we see from them is also historically noted. They seek to preserve the middle class to preserve their status, even if they don't like us. But they want to have more control over it so they can preserve it. That doesn't mean they are on our side necessarily. After all, they are still seeking in increase in their own power and control.

          They are, in the end, merely another piece on the chessboard - being moved about and reacting to the pressures rather than driving any of them. To focus on them is to focus on one hill while losing the battlefield.
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          • Posted by $ blarman 4 months, 1 week ago
            Believe it or not - your choice. When you consider that it is ultimately about control of everything, however, what better way to do that? What does the Fed really lose in such an event? Money? They invented it in the first place! And all they're going to do is force everyone onto the new system where they control literally everything from the money and its valuation to jobs, property, healthcare, etc. It is the ultimate of totalitarian systems and it is so foreign to anything that has been tried in the history of the world that it is very difficult to get a handle on; it's an alien concept that is so cognitively dissonant that we reject it. But all the evidence is there - especially with the Fed going around buying up property - especially farmland in the last few years.
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          • Posted by $ 4 months, 1 week ago
            Good thing it's not a belief system...they've all been saying it: buildback better, the great reset, agenda 2030...it's right on their websites.

            I have a different hypothesis, taking all into consideration but it's not fully hatched yet...of course, then I have to try and prove it wrong...ain't that a B**ch...

            Take care, Bill...Dinner's a waitin my starving stomach.
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    • Posted by lrshultis 4 months, 1 week ago
      Inflation never seems to be something an administration worries about. It just ends in more inflation from attempting to do something about it. Voters have short memories when politicians make promises before elections.
      Suppose government, rather than pretending to borrow money, just printed it, inflating the money supply, and letting the present citizens pay back through loss of purchasing power without pretending that future generations will somehow not notice that the present generation have already spent some of their incomes. I doubt that even with government spending without future debt that the citizens would still vote for the same soothsaying idiots like exist at present.
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  • Posted by $ 4 months, 1 week ago
    Don't forget to thumbs up the post if you think it is worthy; otherwise it won't hit the email hot list. We want all to join in on the fun.
    For me, the comments are the best...just as funny as the memes themselves...we need to laugh and learn otherwise our heads will explode!
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